Early Termination Fees — often abbreviated ETF — are a part of the American wireless infrastructure. While customers might find it annoying to pay a fee typically in excess of $150 to cancel a contract, carriers find the fee very necessary in order to provide cheaper handsets at budget prices. Recently, starting with Verizon Wireless about two years ago, carriers have been moving to a graduated ETF model, wherein users pay less to exit a contract as the contract moves forward. This new model seems more fair on the surface, but what will it actually cost to get out of that wireless contract? In this feature, we're breaking down each of the ETF charges for the four major US wireless carriers.

Most prorated ETF agreements are based on a pretty similar concept: Stay with us for longer, pay less when you leave. Typically after a certain number of months with a wireless provider, the ETF drops by a specific amount till the contract ends. With each provider, however, the methods vary wildly and the actual practice of getting out of a contract can still be a pricey proposition.

T-Mobile

Ironically, the carrier who I respect the most for customer satisfaction has the most restrictive early termination fee policy for two year contracts. On T-Mobile's site, the company states simply that a $200 fee will be applied to any cancellation. Yowch. News reports mention that T-Mobile's proration policy is a little more forgiving than their site would lead to believe. Rather than a specific month-to-month forgiveness policy, T-Mobile instead creates specific time period cliffs which lower the ETF. Once a wireless user hits six months remaining on the contract, T-Mobile will drop the fee to $100. At three months left, the fee gets cut to $50. At 30 days remaining, T-Mobile will charge the lesser of $50 or the balance of the remaining contract.

Overview

• $200 to start
• $100 with six months remaining
• $50 with three months left
• With 30 days remaining, the cheaper of $50 or remaining contract balance
• Best policy for one year contracts, worst policy on longer term contracts

AT&T

They might have the iPhone, but Ma Bell also has one of the most expensive ETFs after T-Mobile. AT&T opts for reducing their ETF each month of a contract instead of creating artificial cliffs, leading people in the middle of their contracts to have a bit better time than T-Mobile customers. AT&T's ETF starts at $175, then decreases by $5 each month. With a two year contract, AT&T customers would pay $85 to jump ship with six months left on their contract, which is $15 cheaper than T-Mobile. However, users on a one year contract would pay $145, $45 more than T-Mobile subscribers.

AT&T's ETF policy is better suited for longer term contracts. If a user had a three year contract for some inexplicable reason, the third year of the contract would range from a $55 fee down to nothing the month before the contract expires.

Overview

• $175 starting fee
• Fee drops by $5 for each month of the contract
• Better suited to contracts over one year

Verizon Wireless

Typically I give Verizon Wireless an excessive amount grief because the company is by far the most anti-consumer wireless company. The carrier does everything in its power to prevent users from using their purchased phone in the most user friendly way, instead opting to nickel and dime consumers at every available avenue. (Ringtones, EV-DO, I could go on for hours.) However, surprisingly, Verizon was the first carrier to offer a prorated ETF clear back in 2006. In fact, AT&T copied Verizon's prorated ETF playbook line by line, with a $175 starting fee, which drops $5 for each month of the contract.

Overview

• $175 starting fee
• Fee drops by $5 for each month of the contract
• Better suited to contracts over one year

Sprint

The newest announcement in the ETF proration game is Sprint. The company operates on a model similar to AT&T, in that each month Sprint drops off a specific chunk of change till the fee seems a bit more reasonable. Sprint trumps AT&T and Verizon's $5 per month drop with a $10 per month drop. However, Sprint doesn't start the clock till six months into the contract. Sprint's ETF ties with AT&T and Verizon at month 15 of a contract ($100), but after month 15, Sprint's ETF is much more competitive than AT&T or Verizon. Sprint's model is less expensive than T-Mobile's model on contracts longer than one year, but T-Mobile is still the place to go for short term buyers. 

Overview

• $200 starting fee
• Fee drops $10 per month starting at month six of the contract
• $100 at month 15 of the contract
• $50 minimum ETF; will not decrement below this amount
• Less expensive than AT&T or Verizon during last months of the contract

All in all, T-Mobile is the best deal around for contracts that are only one year in length, with Sprint being nicer to users when their contract is about to run out anyway (although make note of that $50 minimum cap). AT&T and Verizon, meanwhile, are sort of the middle of the pack for users looking to opt out in the middle of their contract.